Flexibility vs. Rigidity: Does Spain Have the Worst of Both Worlds?

UPF Economics and Business Working Paper No. 450

25 Pages Posted: 6 Oct 2000

See all articles by Gilles Saint-Paul

Gilles Saint-Paul

University of Toulouse I - GREMAQ-IDEI; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Date Written: 2000

Abstract

In this paper we study the structure of labor market flows in Spain and compare them with France and the US. We characterize a number of empirical regularities and stylized facts. One striking result is that the job finding rate is slightly higher than in France, while the job loss rate is much higher, putting Spain half-way between France and the US. This suggests that while Spain has borne the full cost of its labor market reforms in terms of job precarity, the benefits in terms of job creation have been quite modest. We hypothesize that this has been due to the reform's credibility being imperfect, which leads to expectation of reversal.

Keywords: Unemployment, labor market flows, job finding, job loss, flexibility, temporary contracts, labor market reform, unemployment duration, unemployment recurrence, on the job search, labor force composition.

JEL Classification: J20, J21, J23, J41, J42, J63, E24

Suggested Citation

Saint-Paul, Gilles, Flexibility vs. Rigidity: Does Spain Have the Worst of Both Worlds? (2000). UPF Economics and Business Working Paper No. 450. Available at SSRN: https://ssrn.com/abstract=224590 or http://dx.doi.org/10.2139/ssrn.224590

Gilles Saint-Paul (Contact Author)

University of Toulouse I - GREMAQ-IDEI ( email )

Manufacture des Tabacs
21 Allees de Brienne
Toulouse, 31000
France
+33 5 6112 8544 (Phone)
+33 5 6122 5563 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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